Some of the current financial meltdown has moved into the professional sports business in the past few weeks,The most recent was this week when the NFL announced there would be layoffs affecting more than 10% of it's employees. And at least one team has cut back staff due to reduced revenue.
One really big sport that has been seriously effected by the current economic situation has been NASCAR. Nascar is highly dependent on automotive sponsorships to fund their programs and race teams and the effect of the poor prospects for automobile manufacturers has trickled down to the sport.
The past few years, NASCAR has consisted of the Big 4, Hendrick Racing (Jeff Gordon, Jimmy Johnson, Dale Jr.), Roush-Fenway (Carl Edwards, Biffle, Kenseth, etc). Childress Racing (Jeff Burton, Harvick and Bowyer) and Joe Gibbs Racing (Tony Stewart, Kyle Busch and Denny Hamlin). The remaining teams have been racing for the crumbs.
Since the end of the season (just 4 weeks ago), several teams have announced they are closing or have cut back to almost skeleton sized staffs due to lack of sponsorship. Dale Earnhardt Inc cut back from three to one team and then merged with another, Ganassi Racing, which cut back to 2 teams. Bill Davis Racing, which lost the Caterpillar sponsorship has basically closed the doors. The Wood Brothers team, whose history with NASCAR goes back to it's beginnings, has announced it will only compete part time due to lack of a full season sponsor. Petty Enterprises, the most storied and famous name in NASCAR history, has cut back to one team, released it's driver and is trying to merge with another team.
NASCAR teams have always depended on sponsorships, not prize money, to fund their operations and pay their employees. And the lucrative sponsorship money in the past decade has forced teams to seek higher and higher dollar amounts to fund their R&D, their race car inventory and pay their employees.
The 2008 racing season will be interesting starting in the 2nd week. The opening race almost always has plenty of independents trying to qualify for starting positions because the prize money payouts are huge. The 2nd race is when the payouts drop to normal and fail to cover the costs of racing for most teams. I believe there will be many weeks when less than 43 cars enter and try to qualify for the 43 starting positions. That hasn't happened in NASCAR for a long time.
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Did you ever imagine that our economy was going to be this bad? The worst part is, that this is probablyt not its worst. I think the worst is yet to come.... I sure hope not... Thank you for sharing that with us.